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Ken Ziegler, CEO of Logicworks

Unlike many other technology terms that have come and gone, "cloud" will be with us for a long time, but it has become so widely used it has lost its meaning. To understand what someone is talking about, you usually need a modifier, and private cloud is one of the most popular forms that the cloud has taken.

But there is a huge divide in what people mean by private clouds. Service providers like Equinix, Logicworks and many others, offer private clouds that are essentially turnkey systems in which the infrastructure is separated and dedicated, but otherwise the cloud works just like Amazon Web Services, the Rackspace Cloud, or other public clouds. On the other side are private cloud vendors such as VCE, a consortium of VMware, Cisco, and EMC, Hewlett Packard, and others who are offering to sell hardware and software that can be installed in your data center, what I'm calling an "in-house private cloud".

In this article we will examine the arguments of a service provider who argues quite strenuously that in-house private clouds aren't really clouds at all and don't offer the benefits that have made the cloud model so successful in many use cases.

According to Ken Ziegler, CEO of Logicworks, a New York-based cloud computing and managed hosting provider, there is ample reason to “beware of the hype” about in-house private clouds.

Ziegler has a warning about “cloudwashing”: For the CIO or CTO who has a significant infrastructure responsibility, there are many hardware vendors offering bundled solutions for creating and managing that infrastructure. Cognizant that many enterprises still have concerns about throwing mission-critical resources into the public cloud, these vendors offer so-called “private clouds,” because of the implication of extra security and reliability that private clouds carry over the public cloud. But what they’re selling is not really a cloud offering, and it has the potential to cost the enterprise a lot of money, says Ziegler.

Hardware vendors trade on the familiarity users have with their products, and the unfamiliarity they have with the cloud, Ziegler says, citing the example of VCE, a joint venture between VMWare, EMC and Cisco, with backing from Intel, which began advertising that it had a “private cloud solution.” The company used the V-block architecture from Virtual Computing Environment (VCE), a converged box unit that incorporated all the componentry needed to virtualize computing and run a data center at a remote, managed location.

“Their whole pitch was, ‘There’s 10,000 to 30,000 components in each of these things,’” Ziegler says. “‘You shouldn’t worry about those 10,000 to 30,000 components. We commoditized them for you. We sell them to you.’ In reality, it’s not a commodity when it’s hundreds of thousands of dollars to start then you are locked in. You are still buying hardware, software, and virtualization technology, and owning gear. That’s not a cloud of any sort. It’s a commodity when there’s a market that is liquid, and you have multiple places that you can source the exact same thing from.” The enterprise edition of the offering can run into the millions of dollars, and in either case, the customer purchases, rather than rents the asset, he adds.

There are similar offerings from HP and IBM and other vendors, Ziegler notes.

The cloud’s greatest asset is its use of commodity equipment, so that operators are able to offer bulk wholesale prices to the customer. Amazon, Google Compute, Rackspace and Logicworks offer transparent subscription services that allow users to compare apples to apples across providers. The “private clouds” offered by hardware vendors were sold as blocks of components, rather than as individual units, which made them hard to price-compare to traditional cloud offerings, Ziegler says.

“This is a way for larger providers to try to hang onto the enterprise and position themselves as what they call ‘private cloud solutions’, so that [soon-to-be-retired] CIOs or CTOs can defend or retain their jobs, and say, ‘We’re in the private cloud,’” Ziegler says. “Well, if you own the asset, and you’re going to the same vendors that you went to before and you’re plugging them into your data center...it’s not a cloud and you’re not leveraging any of the key economic benefits of cloud.”

Buying highly engineered, packaged products from these “private cloud impostors” is probably going to cost the enterprise significantly more than buying a dedicated private cloud from a service provider that uses commodity servers and storage, purchased independently from Dell, HP, or Super Micro, Ziegler argues.